a1 Permal Group, United Kingdom
International policy-makers so far have successfully pre-empted any new major national legislation in the G7 countries aimed specifically at sovereign wealth funds by getting the International Monetary Fund to work with them on formulating a set of best practices commonly known as the Santiago Principles. However, some observers stress that this is just the beginning. How does one measure and evaluate compliance with these principles? Is voluntary self-regulation really sufficient? Or is there a need for new rules and regulations? As the discussion shifts from policy and economics to governance and regulation, we move firmly into the realm of law—legal norms, rules, and statutes. However, the required clarity and commonality of definitions and terms have been elusive. There does not seem to be universal agreement about the precise meanings of even the most fundamental terms in the SWF debate. This article hence focuses on the definitional challenges inherent in this debate.
(Online publication October 28 2010)
* Managing director, Head of Sovereign Advisory, Permal Group. Permal Group is one of the oldest and largest alternative asset management firms in the world. In the last seven years, the author has focused exclusively on advising and servicing central banks and sovereign wealth funds on various aspects of reserve management. He has a Master’s equivalent degree in Oriental studies from Moscow State University and holds designations from the CFA Institute, the CAIA Association, and the Global Association of Risk Professionals.